Gold pushed over $850 in early London trading, and again during the first hour in New York yesterday, but then eased in listless action to finish the day little changed at $834.60, up $2.40. Overnight, gold has pushed higher.

Platinum was up sharply in the far East, then traded tightly rangebound through the day, rolling between $1020 and $1040 and ending at $1032/oz., up $45. Overnight, platinum has fallen off.

Silver was also rangebound, between $10.70 and $11.10, but fared better than gold as it closed in the upper part of the range at $10.96/oz., up 29 cents. Overnight, silver has edged lower. (Click here for charts)

It was a generally up day for the precious metals, as equities retreated after Monday’s big runup, and oil sank along with the dollar.

Gold’s lack of sharp movement is obviously, at least partially, the result of it being pulled on hard from opposite directions. Those who want to believe that the bailout will return things to ‘normal’ are discounting the metal’s strength; while those who believe they’re witnessing big government’s last big failure are stockpiling like mad.

Thus the disconnect between the paper futures market, and those on the ground who are paying any price to get their hands on actual gold.

“The unintended consequence of the ongoing financial bailout will be a return of inflationary pressures to the commodity markets,” was the curious commentary of analyst Francisco Blanch at Merrill Lynch.

That the buck is deliberately being sacrificed for the perceived lesser of two evils—recession prevention—could hardly make the return of inflation ‘unintended.’

Peter Grant, senior analyst at USAGOLD, seemed more on target when he said that, “I anticipate further debasement of all currencies, including the dollar, which will ultimately drive gold prices higher.”

Meanwhile, analysts at Merrill Lynch, figuring in the inflationary effect of all the bank bailout measures now underway, predicted gold will go to $1,500 an ounce and oil back to $150 a barrel, though they posited no timeline.

MarketWatch.com went further, writing that “with a U.S. administration that’s overseen the biggest deficits in history about to be replaced by the closest thing to a socialist government America’s ever had, ‘stimulus’ spending will likely remain high on Washington’s agenda. Given all that, $1,500 for gold looks more like a floor than a ceiling in the years to come.”

Source: Gold edges slightly higher - But silver, platinum have strong days